As a professional, I am proud to present an article that aims to highlight the similarity between a void agreement and a voidable contract. These legal terms are often confused with each other, but they have distinct meanings that every individual, especially business owners and those who engage in contract agreements, must understand.
What is a Void Agreement?
A void agreement is a contract that is not legally enforceable from the moment it was created. It is considered null and void, and it has no legal consequences. Therefore, if parties enter into a void agreement, they cannot seek any legal remedy in court if one party breaches the contract.
Under Indian Contract Act, 1872, a void agreement has the following characteristics:
– It lacks consideration or legal object.
– The agreement is void ab initio, which means it is void from the beginning.
– It is not enforceable by law because it is against public policy.
– The agreement is illegal and cannot be ratified.
Examples of Void Agreements
– An agreement to commit a crime or fraud
– An agreement that restricts marriage
– A wagering agreement
– An agreement in restraint of trade
What is a Voidable Contract?
A voidable contract, on the other hand, is a contract that may be enforceable or valid, depending on the decision of one of the parties, usually the aggrieved or affected party. It can be considered as a valid contract until the aggrieved party decides to void it.
Under Indian Contract Act, 1872, a voidable contract has the following characteristics:
– There is a lack of free consent between the parties.
– The agreement is enforceable but can be voidable at the discretion of one party.
– It has no legal consequence until it is voided, and the aggrieved party can seek legal remedy.
– The agreement can be ratified by the parties if they wish to do so, and the contract becomes valid from the date of ratification.
Examples of Voidable Contracts
– An agreement entered under coercion or undue influence
– A contract involving fraud or misrepresentation
– A contract with a minor
– A contract entered by a person of unsound mind
Similarity between Void Agreement and Voidable Contract
The similarity between these two concepts is that both are unenforceable contracts. A void agreement and a voidable contract are considered null and void, and they cannot be enforced in court. The difference is that a void agreement is void from the beginning, while a voidable contract can be voided by the aggrieved party.
Another similarity between these two concepts is that they are both against public policy. A void agreement is illegal and void, while a voidable contract is enforceable but can be voided by the aggrieved party if it is against the law or public policy.
Conclusion
In conclusion, understanding the difference and similarities between a void agreement and a voidable contract is essential for anyone who wishes to engage in contract agreements. Whether you are a business owner or an individual who enters into a contract, it is crucial to know the legal consequences of these agreements. A void agreement is a contract that is null and void from the beginning and has no legal consequence, while a voidable contract is enforceable but can be voided by the aggrieved party. Knowing the difference and similarities between these two legal terms will help you avoid legal issues that may arise from contract agreements.